Marketing and promotional mix determination is an integral part of the branding and brand promotion initiative of a company. based on such assertions, Al Fresco too underwent a crucial decision making process of choosing the right promotional campaign that would be appropriate for the strategic initiative of the company as well as fit the advertising budget of the company.
Al Fresco has a limited marketing budget of $185,000 for 2006 and decision has to be made as to which is the right method of communicating to the right target customer at the lowest possible cost. The paper describes what were the contexts that were constraint to make a logical choice, the mathematics involved in the decision making process, and the intuitive reasoning behind the final choice.
The marketing campaigns that are being opted as options for the campaign of 2006 are buzz campaign, trade advertisement, price-oriented promotions, magazine advertisement, and status quo. The first option was buzz campaign that was used in the previous year but provided unexpected results for the supermarkets.
The campaign that was earlier used by the company was buzz campaign that would cost the company approximately $73,000. It is believed by the marketing team of Al Fresco that using this campaign will effectively increase the sales by $95,760 on a pessimistic level and $119,700 optimistically.
However, buzz campaign if used in 2006, will cover areas that were not campaigned in the previous year. However, on other side of this campaign is that the sales executives of the company were apprehensive regarding the reaction of the supermarket buyers who were not happy with the untraditional market campaign and felt that it did not help in long-term brand building. The second campaign alternative with Al Fresco was trade advertisements, which would cost around $80,000 to the company.
In this the target were shifted to the supermarket executives and buyers. It could make an impact on food retailing decision makers by telling them about the brand’s sales and profit potential. Targeting the supermarket executives would help the company increase its shelf space as well as brand awareness. The only problem that the marketers faced in this respect is that Al Fresco was not actually a developed brand and therefore did not have much to offer as a brand.
This promotion option has the virtue of gaining greater credibility from the supermarket executives. The third option is price-oriented promotion that has been a request from the sales force. This increases the attractiveness of the product for the price-oriented customers, and influences, to a great extent, the buying decision of supermarket purchasers.
However, competitors use a more expensive option, this form of advertising campaign also. The fourth alternative is a less expensive magazine advertising campaign. In this Al Fresco can advertise its products in magazines like Better Homes and Gardens, Food and Wine, and/or Cooking Light. There are effectively three options – full page, half page, or quarter page colored advertisement. The demographics readers of these magazines are similar to the target market of Al Fresco.
However, one disadvantage of the campaign is that consumers have to be exposed to the advertisement at least two or three times for it to become effective. The fifth option was status quo wherein the company would not adopt any marketing. This is a risky choice given that Al Fresco was operating in a market that was growing. Given these options for marketing, the next stage was to determine which the right marketing campaign was for the company that would give the best possible results.
The aim of the marketers was to adopt a campaign that would be most cost effective and would help in strategic implementation, would allow strongest reach to the target market and consumers, address all the concerns of the sales executives, and develop goodwill with the supermarket executives and retailers.
Given these constraints, the marketing campaign that was chosen for 2006 is a combination campaign of price promotions and publishing magazine advertisements and delivers the best possible results. This campaign was expected to deliver the required target sales, fit the advertising budget, and retain financial backup in the advertising fund to be used if need be.
The rationale behind adopting these campaigns were mainly to address the concerns of the sales executives as it was believed that price promotion was the most effective campaign nationwide and advertisement in magazine was chosen for its cost effectiveness. Price promotion was to help target the price-sensitive consumers and help the brand building process that would increase shelf space for the products. This would enhance retail relationship of the company.
These efforts will help to push product and build consumer recognition because of the promotional efforts to grow demand. The second campaign strategy employed was advertising in magazines. The option adopted by the company was to advertise in Cooking Light and Food and Wine that provide cheaper advertising options and helps the company to educate and communicate to consumers at a different level.
Using both the price promotion and advertising in magazines helps the company to best utilize the budget resources, investment cost efficiently, allows best possible communication of the brand and product to the target market, provides solutions to the concerns of the sales executives, and build goodwill and growth in retailer relations.
The third stage that has to be considered is the implementation and control of the promotional campaigns. Proper implementation of the price promotion strategy would allow the brand to gain greater shelf space and in-store presence due to higher demand from the consumers.
This would allow greater ease of availability of the products to the consumers. Further, coupons provided through magazine advertisements, direct mails, online or physically on product package would generate consumer interest in the product. This will also educate the consumers regarding where to find the products.
The implementation in the magazine advertisement would be done through advertisements done in two magazines Cooking Light and Food and Wine that has a viewership of 2,600,000 people. The company would place four colored advertisements in Cooking Light and a half page advertisement in Food and Wine. The cost would be $57,840 and $19,882.50 respectively.
Post advertisement campaigns are implemented the final stage and the most important stage would be monitoring the response from these advertisements. Al Fresco must will monitor and evaluate sales and market share after initial implementation of chosen marketing initiatives to review if drastic market share is lost. Further, the marketers must keep track on the return on investment of these campaigns and see if there is positive or negative return.
If either of the campaigns is found to generate negative return, the company will have to adopt a more aggressive approach to marketing. One move could be lowering the process of the product, as the gross margin is 44.6 percent, in order to create greater awareness among customers and increase sales volume. Another would be to promote the products more visibly at the retailers’ location. In the present campaign adopted, there is an expected surplus of budget of $12,277.50 that could be utilized fro emergency situations.